Authorities allege the company improperly reported revenue for which there was no basis in 2006 and 2007, prior to Microsoft's acquisition, Thorsen said. If found guilty, the company could face a fine, he said.

Norway's financial supervisory authority, the Kredittilsynet, referred the company to the police earlier this year after noticing irregularities in its books.

In 2006, Fast Search & Transfer allegedly counted a memorandum of understanding as revenue. In May 2007, the company drew further attention after mistakenly releasing a copy of a presentation related to first-quarter 2007 results. Two months later, Norway's financial authority sent a letter to the company asking for information about its bookkeeping.

As a result of the inquiry, Fast Search &Transfer restated its earnings in May, flipping a 15 million Norwegian krone (US$3 million) profit into a 200 million Norwegian krone loss.

Microsoft could not be immediately reached for comment. However, Microsoft has said it has taken steps to align Fast Search & Transfer's accounting practices with its own.

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